How insurers can use selfies to assess risk
When it comes to insurance, typically an in-depth and detailed assessment of a customer must take place before a policy is finalised and cover is granted. And over decades, actuarial models and underwriter skills have evolved to support this process and help insurers price and pitch their products at the right level. However, US-based startup, Lapetus is looking to change that…with selfies.
Since the company’s inception some two years ago, Lapetus have touted the benefits of biodemographics and facial analytics when it comes to carrying out risk assessments and predicting customer health and life spans. This can best be seen in a launch video for their Chronos underwriting platform released just under a year ago, which promises to ‘change the face of insurance’:
What a selfie says about you
Here’s how it works. Having received a customer’s selfie via email, the platform uses the very latest in facial analytic technology to scan thousands of different facial regions. From this, AI can go far beyond simple recognition of gender and race. It can predict how quickly someone is ageing, detect their body mass index and even whether or not they smoke. Lapetus promises to give organisations in the life insurance and financial planning industries real time insight into their customer's health, mortality and lifespan.
AI and the changing face of insurance
Many life insurance providers in the US and Australia currently require customers to undergo a medical examination before their policy is approved, which takes time. This new move by Lapetus could see customers apply online and be approved for a life insurance policy in under 10 minutes. Not only does this save customers’ time, it will drastically reduce operating costs for insurers who would otherwise have to pay underwriters to assess and draw up quotes for each and every applicant.
Are customers ready to get snap happy?
However, where the big question lies is whether or not customers are ready and willing to get snap happy. Could vanity and the confidence that comes from meeting someone face-to-face stand in the way? In the US, for example, only 3 in 5 Americans own some form of life insurance. And of those considering life insurance products, a survey carried out this year found that 51% of US citizens would still prefer to meet someone before committing to something like life insurance. So, while the ease of application will apply to some, insurers will need to consider how they can tap into the benefits of AI and facial analytic technology, while still maintaining that human connection.
While insurers may want to hang onto their underwriters for a while yet, it’s fascinating insight into how AI and analytical technology has the potential to transform our world and streamline the complex operations of major financial industries.